Case Study$-2$

Scenario

Company XYZ holds an investment in a financial instrument classified as Level $2$ under IFRS $13.$ At the beginning of the year, the fair value of the instrument was $$800,000.$ During the year; market conditions changed, and the fair value at the end of the year was determined to be $$950,000.$ Additionally, there were transaction costs of $$25,000$ when initially acquiring the instrument. Calculate the fair value gain or loss recognized in the income statement, taking into account the transaction costs.

Require: Prepare the Fair Value Gain or Loss $($Marks @$02)$

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